Investment in people key for every business

5th of March 2014

It’s a bombshell that is invariably dropped out of the blue and it can have a devastating impact on your business. When a crucial member of staff announces they are moving on, the fallout can be far ranging, creating more than just an inconvenience for your HR department, reports Hartley Milner

An employee who you rate as indispensable pops their head round your office door and asks “may I have a word please?” You are no clairvoyant, but have enough experience of staff issues to know the line can be a preamble to some unwelcome news.

And so it comes to pass. This bright star of your universe confirms your worst fears and delivers the blow that they are leaving for pastures new. Once you have picked yourself up off the floor, your thoughts start racing.

How are you ever going to replace them? All that experience and know-how lost to the company. What will be the implications of losing such a key employee on the morale of the people in their department? And if that person has built up a close working relationship with your clients, how will they respond?

So you beg an explanation for their decision and while you may not like what you are hearing you ask if there’s anything you can do to make them change their mind. But it’s all too late, and you are left to rue that their dissatisfaction with their lot had failed to register so much as a blip on your radar.

“We know that personnel leave their jobs for various reasons, pay being only one motivation and not necessarily the main one,” said Dean Saddler of employment agency Rightjob UK. “The reason may be non-work related, such as caring for a relative or taking time out to travel. However, it is more common for people to cite dissatisfaction with their job, not getting on with their colleagues or manager, or a hostile working environment.

Simmering resentment

“An employee may feel they are being treated like a packhorse, bearing a disproportionate burden of the workload. It could be that someone is taking advantage of their good nature and eagerness to be useful. The victim in all this may be disinclined to complain for fear of being marked down as an awkward or a troublemaker, so the resentment is left to go on simmering. In time, the stress and pressure of expectation simply become too much and the organisation ends up losing a willing and productive staff member.

“These are the types of issue that organisations fail to pick up on at their cost. It is simply no use at the exit interview for the employer to say ‘I didn’t know you felt like this, why didn’t you come to me earlier?’ By then the damage is done.”

Turnover rates

Saddler added: “In these difficult times, it seems the presumption at the top of some organisations is that it is an employer’s market and people should be grateful to have a job, so will do anything to stay in work. Well, that may be the case up to a point, but it is a big mistake for employers to take their people for granted.

“The average staff turnover rate in a moderate size company is around 15 per cent per year. When that number starts to rise, the costs start to mount in terms of recruiting and training up replacements, let alone the disruption and climate of uncertainty that exists in the void before the position is filled.

“The cost of filling a vacancy works out at around 30 per cent of the salary advertised, while losing a middle manager costs up to 100 per cent of their salary. The loss of a senior executive can be even more costly, as much as 200 per cent of their salary.”

Employee retention is one of the primary measures of the health of your organisation. If you are losing the key drivers of your business (your managers), you can safely bet that other people in their departments are looking at the job ads as well, and then the implications for your business can become very serious indeed.

Studies show a direct link between satisfied employees and happy clients. Disgruntled employees are hardly going to perform at their best and customers may become jittery if they get wind that their supplier has ongoing staff issues, so it makes good business sense to find out what your staff need to stay loyal and contented. This creates an environment of positive, helpful people ready to go the extra mile and beyond for the customer.

Companies that conduct employee opinion surveys and not only listen to what they say but act on the findings have been shown to have a much lower staff turnover rate. As well as saving money on recruitment, they are more likely to keep their customers.

“When it comes down to it, people nowadays want the things they have always wanted – challenging and stimulating work, fair pay, the tools and resources to do their job properly, recognition for work well done and involvement in the decisions that impact on their day-to-day lives at work,”

Saddler added.

Each industry has its own special human resources concerns and contract cleaning is no exception. Recent research conducted in the UK by sector advisory body Asset Skills found that 76 per cent of employers regard their staff turnover to be ‘low’, ‘very low’ or ‘non-existent’. Those reporting higher turnover cite having to offer ‘more for less’ in an industry already dogged by low profit margins.

Loss of staff

The industry has undergone a 2.6 per cent decline since 2009, leading to loss of staff through redundancies, and it continues to suffer image, recruitment and retention problems due to unsociable hours, poor terms and conditions and low wages (often little above the minimum wage). Young people do not believe contract cleaning offers good opportunities for progression, so the sector has a very low take-up of apprenticeships, which are proven to build loyalty.

Steven Proudfoot, interim chief executive of the Cleaning and Support Services Association in the UK, said the main barriers to growth for the industry were the economic downturn, increased competition from start-ups and lack of capital for investment. “However, the quality of new entrants does provide a challenge as employers find it difficult to recruit and retain individuals with the right attitude and skills,” he said.

A major challenge highlighted by employers was training staff to the required level to raise production levels and then retaining those staff. The most commonly mentioned issue was the cost and lack of time available for training. There may also be a culture that promotes the attitude it is not worth training people as they will most probably leave anyway. In response, the CSSA is working hard with its members and Asset Skills to provide industry-wide, nationally recognised training that is “fit for purpose and cost-effective to deliver”.

The industry has actually seen a “significant and continuing” increase in staff morale over the last 12 months. And 60 per cent of CSSA members say they are looking to grow their business over the next three years, either ‘rapidly’ or ‘moderately’. Where the turnover of staff is high, it is likely to be due to increasing workloads and demands placed upon those remaining in their jobs.

Customer service

Proudfoot warned: “Employers who choose not to act to positively engage their workforce can expect a loss of productivity and risk the satisfaction of their customers. As competition increases, procurement processes have become more formalised and professional with a greater emphasis placed upon customer service. This will be a risk to those businesses that, through mismanagement and a lack of communication, have created low staff morale that has led to a compromised customer/client service offering.”

He said employers can improve staff retention by tightening up their recruitment processes and how they highlight opportunities to recruits. They can offer qualifications such as apprenticeships, ESOL courses, basic literacy and numeracy, as well as encourage staff who aspire to advance themselves. Smaller businesses can take advantage of discounted human resources and on-line training support available through their trade association and reward their line managers for promoting staff morale and retention.

For its part, the CSSA has responded to employers’ concerns by offering a training programme, discounted for its members. This includes online modules and technology-supported learning specifically for the cleaning and facilities management sectors. Along with other member benefits, the association is also helping contractors gain the management and leadership skills they need to put in place effective recruitment processes.

“Many of our members are making a move towards daytime cleaning through hybrid cleaning offers,” said Proudfoot. “Daytime work may help some employers attract staff into roles. Asset Skills has piloted a number of programmes aimed at encouraging a younger workforce into the contract cleaning and facilities management sector. It has also piloted business coaching and talent management projects directly with contract cleaning employers, which have had a focus on financial viability, service delivery and team performance.”